Power producers set for coal price rise

Chinese power producers may have to pay as much as 8 per cent more for their coal in 2006, a third year of record prices, after buyers and sellers were allowed to negotiate and set contract prices.

Coal prices in China, the world’s biggest consumer and producer of the fuel, increased in late 2004 because of rising power demand. Transportation bottlenecks in the rail network in 2004 prevented efficient delivery of coal and bolstered prices, increasing costs for the nation’s electricity generators and led to power shortages.

Xinhua